1. Training YOU to Recreate Your World
Lean Office
Training YOU to Recreate Your World

2. Course Agenda Lean office overview Definition of waste
Orientation to YESCO Hawaii
Round one of simulation
Value Stream Mapping (current state)
Implementing lean tools
Round two of simulation
Value Stream Mapping (future state)
Round three final simulation
Final Evaluation 2

3. Introductions Who are you? Where are you from?
What do you want to learn today?
?’s 3

4. What is Lean Office?
Lean Office is a systematic approach applied to the value chain with an aim to streamline the business processes by:
Eliminating waste
Utilizing lean techniques
Resulting in: Lead time reduction and Productivity improvement 4

5. Why Lean Office? “In America today we have good people
working in poor processes. What we want
is good people working in great processes”
Michael Hammer 5

6. Why Lean Office?
“ Toyota Production System will not work unless it is used as an overall management system. TPS is not something that can only be used on the Production floor.”
Taiichi Ohno 6

7. Lean Office $
LEAD TIME REDUCTION
Time equals money 7

8. “Eliminate Non-Value Added Activities”
Waste Elimination
Business as Usual
Customer
Contact
Waste
Customer
Delivery
Lead-Time
Lean Systems
“Eliminate Non-Value Added Activities”
Processes have evolved over the years but may never have been mapped and recalibrated toward no waste
Customer
Contact
Customer
Delivery
Lead-Time
(Shorter) 8

9. Value Added vs. Non-Value Added Activities
Value Added (VA)
The customer is willing to pay for it
Physically transforms the product (or document or information)
Is done right the first time
Non-value Added (NVA)
Consumes resources, but does not add value to the product or service
Necessary Non-value Added (N-NVA)
Does not add value to the product or service but are
CURRENTLY NECESSARY
Customer Contract or specification
QS 9000 or customer standard
Government regulation
Current state-of-the-art work method or technology 9

10. Why Lean Office?
Only 30% of the total costs are directly manufacturing
Where is the rest of the money being spent? 10

11. with customer demand and requirements
Lean Organization
Process View
Business Operations
Customer
Delight
A streamlined flow of goods or services through an organization in concert
with customer demand and requirements
We can begin to reduce the complexity of an organization by implementing Lean Tools and Techniques in support processes. We can gain a competitive advantage by streamlining the organization, focusing on these four areas
1) Identify, manage or break the constraints
2) Eliminate waste and non value added work
3) Synchronize all activities toward customer
delight
4) Apply an employee based cross functional
continuous improvement plan
We can begin to reduce the complexity of an organization by implementing the Lean tools and techniques in the support processes. We can gain a competitive advantage by streamlining the organization by focusing on these four areas.
Where are the constraints?
Where is the waste in the processes?
Are all processes focused on the customer?
Do the employees have an understanding of the overall business?
Streamline, Synchronize, and Integrate 11

12. Business Activities 12 Two points:
Look at how producing the parts (perform manufacturing operations) is just a small part of the big picture and is most of the “value added activity”
Look at all the support activities and how the Lean Champion must navigate through all the “functional silos” 12

13. Sites of Waste Policies Macroscopic wastes Major wastes
Organizational structure
Management policies and methods
Macroscopic wastes
Supply chain
Office layout
Major wastes
Process and cell level
Microscopic wastes
Operator and computer level 13

14. Lean = Eliminating the Waste
Value Added
Defects
Overproduction
Waiting
Non-utilized talent
Transportation
Inventory
Motion
Extra processing
Typically 95% of Total Lead Time is Non-Value Added!!!
©2006 MMTC 14

15. Waste of Defects Money and time wasted to find and fix mistakes
Lack of process controls
Poor work instructions
Inadequate training
Data entry error
Missing information
Missed specifications
Pricing error
What defects do you see in your company?
Ask for examples… 15

16. Waste of Overproduction
Making multiple schedules due to system incompatibilities
s/memos to everyone
Printing extra documents just-in-case
More information than the process requires
More information than the customer needs
Creating reports no one reads
Ask what they see in their company. 16

17. Waste of Waiting Time lost when people and resources are waiting:
Unbalanced workload
Equipment break downs
Batch processing
Waiting for information
Waiting for copiers/faxes
Waiting for customer response
Waiting for an internal response
Ask examples from them 17

18. Waiting Waste
Packages delivered and waiting. Where should they go? Who do they belong to?
©2006 MMTC 18

19. Waste of Non-Utilized Talent
Unclear job descriptions
Lack of training
Lack of synergy and collaboration
No feedback loop for continuous improvement
Suggestions for improvements that are not investigated/utilized
This creates a lot of waste. Errors are made, questions need to be asked with no one around who has the answers, folks working with blinders on. 19

20. Waste of Non-Utilized Talent
The subject matter expert is not asked for her input to solve the problem 20

21. Waste of Transportation
Poor office layout
Walking around to correct mistakes and find answers
Retrieving or storing files
Carrying documents to and from shared equipment
Going to get signatures
Taking files to another person
Ask for other examples 21

22. Waste of Inventory Storing of obsolete prints and specs
Obsolete databases/files and folders
Files pile up between work desks
Open projects (WIP)
Office supplies
s waiting to be read
Unused records in a database
Is this happening in your company? Other examples 22

23. Inventory Waste
Looks like too much toner on hand especially since they just replaced the machine that uses it 23

24. Waste of Motion Looking for items because they are out of place
Mis- or unfiled papers
Saving files everywhere
Handling paperwork that could be electronic
Extra clicks or keystrokes
Working around other open files on desk
Ask for their examples 24

25. Waste of Extra Processing
Doing more than is required to meet customer requirements
Unnecessary paperwork
Redundant approvals
Repeated manual entry of data
Use of outdated standard forms
Use of inappropriate software
Creating hard copies of reports
What examples do they have? 25

26. Above the Shop Floor… This pile represents over a dozen jobs.
How many labor hours to produce this paper?

27. Tell me about this photo…
What else do you see?
Are there any hidden images?
Were you even going bother to look until I ask you?
Waste in the Office manisn’t always

28. Office Simulation Let’s learn by doing! 28
Exercise: Break group into teams of 4-5 and spread the teams out to different white boards. Have them draw the DOWNTIME acronym and list 2 to 3 examples of each of the 8 wastes that exists in their office. 28

29. YESCO Hawaii
A New Division 29

30. YESCO Hawaii Orientation
You are all employees of YESCO Hawaii
Positions to be filled:
- Sales - Material Control
- Business Office - Scheduling
Engineering - Production/Installation
Process Engineer
We will work in batches of 5 at Sales and 1 everywhere else
We will measure the following
- # of orders shipped
- # of invoices faxed
- # of quote drawings completed
- Work in process 30

31. YESCO Hawaii – Company Policies
Work shift is 10 minutes
Keep busy at all times
The goal is to Install and invoice 14 orders and complete 3 new business quotes 31

32. YESCO Hawaii
Round 1 32

33. Metrics Scorecard
Select an extra person to fill out this chart 33

34. Round 2 YESCO Hawaii 34 Make your improvements and lets try it again
Make some improvements!
Make your improvements and lets try it again 34

35. Metrics Scorecard
Enter your data into your chart 35

36. Learn the tools to recreate your WORLD
LET’S GET LEAN
Learn the tools to recreate your WORLD 36

37. DVD
Its all about
Time
DVD is the “Time” DVD showing office waste – 18 mins. 37

38. Characteristics of a Lean Process
People arranged in process order
One-piece flow processes
Ergonomically-correct work areas
Pull system discipline
“Standard operations” defined and implemented
Cross-functional, multi-process associates
Process intolerant of abnormalities
Improves morale, safety, reduces waste… Ask how? 38

39. 7 Steps for Value Stream Mapping with Swim Lanes
Create a macro level flow of process
Select a functional area to map
Detail the steps
Identify NVA and N-NVA steps
Analyze the process
Develop a future map
Develop and implement action plan 39

40. Create Flow of Process
Have someone sketch it up on the board

41. 2. Select Functional Area or value stream Break up departments into “swim lanes”
“YESCO Hawaii” Value Stream Map of business process
Swim Lane border (divides departments)
Sales
Business Office
In this case we will look at the whole business process
Material Control
Scheduling
©2006 MMTC 41

42. 3. Detail the Steps

43. Process Mapping Guidelines
Gather the information from the actual process - “go see” where the work is being performed
Get the real data versus the theoretical way it should be done or the way people “think” it is done
Use the “experts” (people doing the work) to develop the maps
Use the maps as a microscope on the process to allow you to see where to make improvements
What are some examples? 43

44. Use the Experts… 44

45. Explanation of Flow Diagram Symbols & Colors
Describe the process step O
If the step is Non-Value Added, which DOWNTIME waste(s) does it represent? W N T I
Color in: M
What is the walk/travel distance? E
Value Added
Non-Value Added
Necessary Non-Value Added
How much time does it take to complete the process step? 45

46. Explanation of Flow Diagram Symbols & Colors
Represents “Inventory” 46

47. Explanation of Flow Diagram Symbols & Colors
Yes or No?
Represents a “Decision” 47

48. Explanation of Flow Diagram Symbols & Colors
Connects a process within a swim lane 48

49. Explanation of Flow Diagram Symbols & Colors
Connects steps that cross swim lanes 49

50. Explanation of Flow Diagram Symbols & Colors
Optional
Represents electronic work/data transmission 50

51. Explanation of Flow Diagram Symbols & Colors
RAI
Represents document Reviews, Approvals or Inspections (RAI) 51

52. 4. Identify NVA & N-NVA Steps

53. Examples of NVA Activities
Traveling (excess transportation or motion of people or materials)
Inspecting or checking (review-approval-authorization cycles)
Work reporting (“done right the first time” rule)
Redundant or unnecessary data entry
Supervising
Counting
Reformatting or creating duplicate copies
Filing and file maintenance
What are some examples? 53

54. 5. Analyze the Value Stream Map
1. Total each of the different process events
Time
SLAM – swim lane analysis matrix
Handout copy – have them fill it out
Steps 54

55. 5. Analyze the Value Stream Map (using Starbursts)
NOTE: Paste a bright green post-it near improvement opportunities that you have identified from you current state value stream map. Write a small description of the waste and how to fix it.
STARBURST

56. 5. Analyze the Process Map
2. Identify opportunities to combine steps that occur between two or more people
In order to eliminate handoffs or delays
3. Identify opportunities to perform work simultaneously instead of sequentially
In “parallel” instead of “serially”. What is the earliest a particular work step can occur?
Identify opportunities where work (documents or information) can be delivered to the next person or operation one piece at a time instead of delivering work in a “Batch”
Identify opportunities to build into the process signals or advanced notice to downstream departments to prepare to receive or produce work
What are some examples? 56

57. Parallel vs. Serial Processing57

58. 5. Analyze the Process Map
4. Identify opportunities to “co-locate” people doing work:
To improve communication
To reduce the effects of handoffs and of transportation distances.
5. Identify opportunities to automate any of the work
Electronically capture and transmit documents (scan-mail)
Replace manual handoff with an electronic handoff
Electronically capture and report process events and work status
Replace hard copy forms, worksheets, or spreadsheets with electronic versions, accessible from the network
Electronically combine several documents into a single database
What are some examples? 58

59. 5. Analyze the Process Map
6. Identify problems which if solved will reduce time or error rate
7. Determine whether the entire process is a candidate for “reengineering”
What are some examples? 59

60. 6. Develop Future Map
Now that opportunities for improvement have been identified through the analysis step, start a new map incorporating the improvements you identified. Remember to take a picture of your before and after states. 60

61. 7. Develop & Implement Action Plan
Create a list of actions
Prioritize the list – Impact-Difficulty Grid
Assign responsibility
Define due dates
What are some examples? 61

62. Impact/Difficulty Matrix
Easy
Hard
High
Impact
What are some examples?
Low 62

63. Sustaining Improvements
Recognize that several follow-up activities may be necessary:
Implementing and refining a measurement or performance monitoring system
Initiating additional improvements or corrections based on the measured results of the improved process
Reconvene Team representatives until the projected levels of improvement have been achieved and sustained for at least three months
What are some examples? 63

64. Exercise – Map the process!
What are some examples? 64

65. Symbols & Colors for Process Mapping
Step
Between Process Step
Same Person Step I
RAI
Inventory
Review, Approve Inspect
Decision 65

66. Lean Tools
Fill up your Tool Box! 66

67. Establishing Takt Time
Takt Time is the pace needed
to meet customer demand.
If you have a Takt Time of two minutes, that means every two minutes the process is completed once.
Every two hours, two days or two weeks, whatever your sell rate (customer demand) is your Takt Time.
Establishing Takt Time
Your Operating Time per Shift
Takt Time =
Customer Requirement per Shift = 60
sec
GOAL: Produce to Demand!
27,600 sec (7.67 hours)
460 orders 67

68. If you can’t do 5S, you can’t do Lean!
5S & Visual Management
A proven method used to systematically organize, clean, and standardize the workplace
If you can’t do 5S, you can’t do Lean! 68

69. 5S & Visual Management Seiri Saiton Seiso Seiketsu Shitsuke
Sort Set-In-Order Shine Standardize Sustain
Clear out Configure Clean Conformity Custom 69

70. Elements of a 5S Program 5S
Sort - what is not needed, sort through, then sort out; “When in doubt, throw it out!”
Set-in-order - what must be kept; make visible and self-explanatory so everyone knows where everything goes
Shine - everything that remains. Clean equipment, tools and workplace
Standardize - implement best practices to keep the workplace clean and organize
Sustain - making a habit of properly maintaining correct procedures 5S 70

71. What is Standardized Work?
Standardized Work is a method enabling employees to improve their control of operations and measure their performance against documented standards
Performance is optimized by reducing variation and waste in operations by the efficient arrangement of people, products, and machines, thus improving product quality 71

72. Cellular / Flow Processing
Arrange people and workspace to achieve one-piece flow
Minimizes wastes of:
Transportation
Inventory
Motion
Extra Processing
Defects
Overproduction
Waiting
Non-utilized Talent
Single piece flow
Pull process control
Reduced waste
Improved floor space 72

73. One Piece Flow
Consider these conditions for “flow” in the office setting:
One piece processing versus “batch”
People in process sequence
Multi-process work sequence
Multi-process skilled people
Synchronization of operations (work balance) 73

74. Poka-Yoke / Mistake-Proofing
Poka-Yoke is the removal of all potential causes of error either through design, process, or mistake-proofing devices, to ensure consistent process results
Poka-Yoke helps build quality into processes to achieve “Zero Defects” 74

75. Kaizen Kaizen has a bias for action! Kai = Change
Zen = Good (for the better)
Kaizen = Continuous Improvement
Kaizen has a bias for action! 75

76. Round 3 Yesco Hawaii What are some examples? 76
Remember to think outside the box!
What are some examples? 76

77. Metrics Scorecard
Enter your data into your chart 77

78. Customer Service Request – IT Provider
Old Process – Average 50 days
New Process - Average 7 days
Waste removed
Define
order
Service Rep
defines order
Customer
Customer
Service Rep
Mgr verifies
order
Customer Service
Prepares form
Admin inputs
To data base
Mgr approves
quote
Quote
Needed? No
Yes
Mgr approves
quote
Purchasing
quotes order
Admin inputs
to data base No
Quote above
$8,000?
Yes
The lead time to fulfill a customer service request was dramatically reduced by mapping the process and focusing on non value added work..
Mgr
approval
Mgt Board
approval
Purchasing fills
order
Account VP
approval
Order processing
Receives and
Signs off
Admin sends
Approval notice
Order processing
Receives and
Signs off
Purchasing fills
order 78

79. YESCO Las Vegas Success Story
The business office has reduced Node 5 (last day of labor to date of invoice) from an average of 15 to 20 days to 5 to 12 days for the Exteriors Branch.
The same concepts are being used to streamline the billing process for Interiors eliminating several hand offs and reducing Node 5 as well. 79

80. YESCO Electronics Success Story…80

81. Lending Process – Financial Institution
Time spent by Loan Processor – Old Process
10/15%
10/20% 5%
60/75%
Adm/clerical
-filing
-typing
-mailing
-gathering data
General phone
Inquiries from
members
Fill in for
Other staff
Loan Processing
New Lean Process after Kaizen Event
In the banking industry revenue is generated mainly by interest received from loans. The shorter the lead time for the lending process allows more loans to be generated. This increases revenue for the bank.
In this example Loan Processor time was spent on non value added work. Reassignment of the clerical work and a new process for taking phone calls dramatically improve the time for Lending money. 5% 5%
90%
Phone inquiries
Loans only
Fill in for
Other staff
Loan Processing 81

82. Keys to Success Create a sense of urgency
Have a vision, communicate it continuously
Focus on key process drivers
Remove all obstacles to achieve the vision
Create short term victories
Don’t declare victory too soon
Speak with data
Don’t assume
Analyze data – doubt it
Make decisions with data
Take action based on data
Check results 82

83. The ideal first project…
… is clearly and unambiguously measurable. This is not always possible for administrative Kaizens.
…satisfies a widely-perceived need.
… is a repeatable process.
… is self-contained, not subject to uncontrollable external influence. 83

84. Administrative Process Improvement
Administrative Kaizens are often discontinuous mini-Kaizens.
The team meets first to understand the nature of the project and decide what they will need to know. The current state is described. A process map may be developed.
Any information unavailable at the first meeting is provided prior to the second meeting.
The second meeting is generally one day. The project is analyzed and a complete action plan is developed. The plan is implemented and the outcomes are monitored.
If necessary, a follow up meeting is held. . 84

85. The Kaizen Project Team
Team members are selected on a project-by-project basis.
There is a team leader chosen to facilitate and coordinate. The leader is not in charge in the traditional sense.
The team can be comprised of:
Subject matter experts in the target area.
Others in the same segment of the organization.
Individuals from other areas of the organization.
This includes technical staff.
Individuals from outside the organization. 85

86. The Kaizen Project Team
An open, egalitarian structure is important.
When Kaizen project work is underway, organizational position is irrelevant and disregarded.
All team members are considered equal within the team. 86

87. Key Kaizen Tenets
An open atmosphere is critical. Free thinking and contribution are necessary.
Everything is open to question. No assumptions are made.
A Kaizen event is not developing a list of ideas or recommendations to be studied. The outcome is implemented. 87

88. Now – Recreate that World
Map it – with the experts
Study your map
Implement changes
Celebrate
Study and implement more changes
Repeat, Repeat, Repeat 88

89. Questions? 89